Posted by: DrAlanRae | September 2, 2007

What’s wrong with planning

This piece was stimulated by some work I was doing in the Punch Above Your Weight hands-on session last Friday to help someone develop an adwords campaign.

This person works for an organisation dedicated to business support for the over 50s and he was concerned that following the official line from the business link where you are advised to plan everything before you start is going to turn off something like 60% of the potential market because they don’t want to sit through 12 hours of stuff to get at the 30 minutes of info that they really need. (I’m wrestling with this issue all the time on my training guidelines project too.)

So what might be wrong with planning?

Well we might look at what happened to the Soviets and think a bit about how we might make use of the invisible hand.

Planning it before you start means that you think you know

What the customers want

How they want to interact with you

The truth is you don’t. On the basis of 4 new business start ups and many more product launches over 25 years I feel quite confident about that.

The Market NEVER wants what you want to sell it. It usually wants about 50% of what you think mixed up with a load of other stuff you haven’t thought of yet. And it may want things supplied in ways you never imagined.

Your task is to hold true to the spirit of your original vision while dancing a tango with the market place to allow your vision to morph into something that will work.

Let’s talk about our organic veg. business. We got into this by accident as expansion of our www.plants4presents.co.uk business meant we had to obtain some premises which involved us getting 2 acres of glasshouse more than we needed. So we’re sitting there thinking about what we can do with this asset. Growing vegetables in an unheated house seemed like a good bet but we have never done this commercially – how should we decide what to sell and what were the best processes.

So we decided to follow the money. We grew a ridiculously wide range of crops because we had no idea what people would want. Along the way we found that next critical factor after the demand was how easy was the crop to prepare. Anything that grows above the ground is ok (apart from peas which are a disaster) and anything that grows below the ground – like carrots – can be problematical.

How did we sell it? Cold calling in person followed by email for remote ordering seems the best process.

But what about the commercial terms – should we ask for 7 days, 15 days? It turns out that they expect to give you fivers out of the till when you deliver or they collect. This is why people run cash businesses – they want to get rid of the cash because the banks are going to charge them for banking it.

Should we bag the produce? If they know what they’re doing it gets in the way – it subtracts value. If they don’t know what they’re doing it’s a life saver for them.

We could have sat in a room and researched and planned for weeks without finding any of that out. Mainly because (speaking as a market researcher myself) you don’t know what questions to ask until you get in amongst it.

Learning by doing. That’s how people are – that’s what they want.

Convincing government funders of this and the need to fund training that doesn’t lead to some useless NVQ is a different story

I’ll be back

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Responses

  1. Alan knows what he is talking about! This is an excellent blog – thank you. Regards, Nigel Temple.

  2. Planning is essential but the key is to flex it to react to the demands of the market. My experience is too much time is spent convincing the market to buy whereas it should be modifying the product to make it easier to buy

    Rob Hook

  3. Thanks for your contributions chaps.

    It’s an interesting observation Rob, that when people want to expand 3 times as many try to find new customers for their existing products rather than find new products for their existing customers.

    Despite it being much easier to follow route 2!

    Alan

  4. Great article, constructive feedback.

    Planning is essential but so is testing the market. A good business plan will include forecasting, part of which needs to be contingency planning – what I will do if Plan A fails?

    As Alan suggests, you need a Plan B: Diversification – something that complements the existing business but brings in new customers. Florist alongside greengrocery or dvd’s/music alongside computers or televisions (not innovative suggestions but you get the giste).

    If the new product or service doesn’t complement the old then start a new business – selling perfume alongside repairing computers doesn’t quite go together; it’s not professional looking and can make you seem desperate!

  5. Hi
    I so agree with your last paragraph. In my case, I’ve spent the time in the runup to launching my new business researching, rather than planning. My plan is to start asking questions in the target market about if and if so, how, they are addressing the issue which I would like to offer to help them tackle. Having had a disastrous dry run last year in a situation where market assumptions were made I have learned my lesson.

    Regarding the comment above, selling perfume alongside repairing computers doesn’t make you look desperate. The market is very competitive now and small businesses and sole traders have to be portfolio people because the truth is, we ARE desperate!

    What’s unprofessional isn’t doing it right – if you are selling quality perfume in an organised and businesslike way and repairing computers in an organised and businesslike way, should it matter what anyone thinks.

  6. Edit: I agreed with Alan’s last paragraph!


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